The federal government has proposed to exempt minimum wage earners from Personal Income tax over the rising inflation.
The proposal, which will be included contained in the 2020 finance bill, is expected to reduce the effect of inflation on low income earners in the country.
“We are proposing in the new Finance Act that those who earn minimum wage should be exempted from paying income tax,” President Buhari said.
“These provisions which complement the tax breaks given to small Biz last year will not only further stimulate the economy, but are also a fulfilment of promises made to take steps to help reduce cost of transportation & the impact of inflation on ordinary Nigerians.
On Saturday, Nigeria officially slid into its worst economic recession in over three decades.
According to gross domestic product numbers released by the National Bureau of Statistics, the nation recorded a contraction of 3.62 percent in the third quarter of 2020.
The last time Nigeria recorded such cumulative GDP was in 1987, when GDP declined by 10.8 percent.
At its sitting on Wednesday, the federal executive council approved the 2020 finance bill which, among others, seeks to amend various acts of 13 taxes, including the personal income tax act.
Zainab Ahmed, minister of finance, budget and national planning, said the bill will improve the country’s tax laws while also reducing some taxes especially for small businesses in addition to those already reduced in the 2019 finance bill.
